sequoias
June 10th, 2005, 05:29 AM
Please read this carefully! it's $2 billion including the other charges, like staff, property buy outs, and other stuff like this.
Thursday, June 9, 2005 - 12:00 AM -- Updated 11:49 AM
Monorail price tag exceeds $2 billion
By Mike Lindblom
Seattle Times staff reporter
Joel Horn, monorail project's executive director
Seattle Monorail Project updates
State auditor's letter to Monorail agency
Breakdown of $2 billion price tag
The price of Seattle's planned monorail has surpassed $2 billion, adding to the public cost of a project that already is likely to take decades to pay off.
Monorail officials had advertised a $1.75 billion estimate when voters approved the line in 2002. Reasons for the increase include higher costs for staff and design consultants as well as land purchases for stations on the 14-mile line from Ballard to West Seattle.
Meanwhile, State Auditor Brian Sonntag, noting concerns about monorail financing, contracting and public disclosure, has notified the Seattle Monorail Project (SMP) that his office will review those issues in the agency's upcoming annual audit. His letter, dated Tuesday, mentions State Treasurer Mike Murphy's doubts that the monorail's car-tab tax can raise enough money to pay off construction debt.
Last week, monorail officials announced a tentative contract with a team of companies to build the tracks, stations and trains for "$1.6 billion and change." When land, agency overhead and other costs are added, the total rises to just over $2 billion, a Seattle Times review shows.
SMP Executive Director Joel Horn said the overall costs, plus additional cash reserves, amount to $1.94 billion in today's dollars, after adjusting for a 6 percent inflation rate. The Times and original monorail projections described dollars in the year they are spent, not adjusting them for inflation.
Like many large public-works projects, the monorail relies on selling bonds to raise money for construction because taxes generally don't flow in early enough to pay the builders.
Horn said he expects to raise more than enough money to complete the project, despite a voter-approved debt limit of $1.7 billion in current dollars. The 2002 ballot measure did not set a spending limit on the project.
The agency intends to minimize its debt payments in the short run by deferring interest payments to later years while issuing bonds of up to 40 years in duration. The bond repayments would be timed so the outstanding principal never breaks the debt cap, Horn said.
Critics have likened a 40-year debt plan to a family making the minimum payment on a credit-card bill.
Asked if the agency is trying to sidestep the debt cap through its borrowing strategies, Horn answered: "Does it break faith with the voters? Absolutely not, period.
"The point here is, we have done something amazing," he said. "We have taken a project with a very substantial problem and managed to deliver it with one-third less revenue." Car-tab taxes have been coming in about a third less than the original plan predicted. Monorail planners had predicted that plan could retire the tax in roughly 25 years.
Krista Camenzind, of the critics' group OnTrack, disagreed with Horn. "Wasn't the whole point that this was a well-planned and disciplined project? That's the rhetoric they were using at the time."
The tentative contract contains 16 of the 19 stations previously proposed. Trains would arrive eight minutes apart on opening day in 2010, because the agency will buy fewer train cars. Monorail officials have mentioned the possibility of funding extra trains by tapping into the proposed $4 billion budget to replace the Alaskan Way Viaduct with a tunnel.
Peter Sherwin, a sponsor of two pro-monorail initiatives, said a bottom line of $2 billion seems acceptable.
He sees the plan now for fewer stations as a plus, speeding travel times. The plan has improved because it includes special downtown track switches to allow the city core more-frequent service, he said. Stations were moved to off-street sites for aesthetic reasons, an expensive change. He believes another downtown station, at Second Avenue and Madison Street, will be added back by opening day.
Builders must obtain $500 million in liability insurance to guarantee a finished line. Cleve Stockmeyer, a monorail-board member, said that provision has added tens of millions of dollars to the contract with Cascadia but provides value unseen by the average citizen.
"This is within 10 or 15 percent of what the estimates were," Sherwin said. "Many of the people who were critics of the system insisted on some of the changes that are happening today. ... Those people, if they were honest in their answers, will say we've improved it."
Voters have backed a monorail four times since 1997, SMP board member Cindi Laws pointed out. She remains comfortable with the cost, in part because she expects the system to last a century.
"We're breaking faith if we don't build the project. The point is to be rational and clear-headed, and not spend 10 cents more than we have to spend," she said.
The agency plans to release more details June 20. Horn said the package contains $234 million in cash reserves, though roughly half is earmarked for known needs such as relocating underground utility lines, compensating Seattle Center for the loss of the current monorail, and public art.
If construction goes well, Horn said, money will be available in 2007, 2008 or 2009 to add stations.
Thursday, June 9, 2005 - 12:00 AM -- Updated 11:49 AM
Monorail price tag exceeds $2 billion
By Mike Lindblom
Seattle Times staff reporter
Joel Horn, monorail project's executive director
Seattle Monorail Project updates
State auditor's letter to Monorail agency
Breakdown of $2 billion price tag
The price of Seattle's planned monorail has surpassed $2 billion, adding to the public cost of a project that already is likely to take decades to pay off.
Monorail officials had advertised a $1.75 billion estimate when voters approved the line in 2002. Reasons for the increase include higher costs for staff and design consultants as well as land purchases for stations on the 14-mile line from Ballard to West Seattle.
Meanwhile, State Auditor Brian Sonntag, noting concerns about monorail financing, contracting and public disclosure, has notified the Seattle Monorail Project (SMP) that his office will review those issues in the agency's upcoming annual audit. His letter, dated Tuesday, mentions State Treasurer Mike Murphy's doubts that the monorail's car-tab tax can raise enough money to pay off construction debt.
Last week, monorail officials announced a tentative contract with a team of companies to build the tracks, stations and trains for "$1.6 billion and change." When land, agency overhead and other costs are added, the total rises to just over $2 billion, a Seattle Times review shows.
SMP Executive Director Joel Horn said the overall costs, plus additional cash reserves, amount to $1.94 billion in today's dollars, after adjusting for a 6 percent inflation rate. The Times and original monorail projections described dollars in the year they are spent, not adjusting them for inflation.
Like many large public-works projects, the monorail relies on selling bonds to raise money for construction because taxes generally don't flow in early enough to pay the builders.
Horn said he expects to raise more than enough money to complete the project, despite a voter-approved debt limit of $1.7 billion in current dollars. The 2002 ballot measure did not set a spending limit on the project.
The agency intends to minimize its debt payments in the short run by deferring interest payments to later years while issuing bonds of up to 40 years in duration. The bond repayments would be timed so the outstanding principal never breaks the debt cap, Horn said.
Critics have likened a 40-year debt plan to a family making the minimum payment on a credit-card bill.
Asked if the agency is trying to sidestep the debt cap through its borrowing strategies, Horn answered: "Does it break faith with the voters? Absolutely not, period.
"The point here is, we have done something amazing," he said. "We have taken a project with a very substantial problem and managed to deliver it with one-third less revenue." Car-tab taxes have been coming in about a third less than the original plan predicted. Monorail planners had predicted that plan could retire the tax in roughly 25 years.
Krista Camenzind, of the critics' group OnTrack, disagreed with Horn. "Wasn't the whole point that this was a well-planned and disciplined project? That's the rhetoric they were using at the time."
The tentative contract contains 16 of the 19 stations previously proposed. Trains would arrive eight minutes apart on opening day in 2010, because the agency will buy fewer train cars. Monorail officials have mentioned the possibility of funding extra trains by tapping into the proposed $4 billion budget to replace the Alaskan Way Viaduct with a tunnel.
Peter Sherwin, a sponsor of two pro-monorail initiatives, said a bottom line of $2 billion seems acceptable.
He sees the plan now for fewer stations as a plus, speeding travel times. The plan has improved because it includes special downtown track switches to allow the city core more-frequent service, he said. Stations were moved to off-street sites for aesthetic reasons, an expensive change. He believes another downtown station, at Second Avenue and Madison Street, will be added back by opening day.
Builders must obtain $500 million in liability insurance to guarantee a finished line. Cleve Stockmeyer, a monorail-board member, said that provision has added tens of millions of dollars to the contract with Cascadia but provides value unseen by the average citizen.
"This is within 10 or 15 percent of what the estimates were," Sherwin said. "Many of the people who were critics of the system insisted on some of the changes that are happening today. ... Those people, if they were honest in their answers, will say we've improved it."
Voters have backed a monorail four times since 1997, SMP board member Cindi Laws pointed out. She remains comfortable with the cost, in part because she expects the system to last a century.
"We're breaking faith if we don't build the project. The point is to be rational and clear-headed, and not spend 10 cents more than we have to spend," she said.
The agency plans to release more details June 20. Horn said the package contains $234 million in cash reserves, though roughly half is earmarked for known needs such as relocating underground utility lines, compensating Seattle Center for the loss of the current monorail, and public art.
If construction goes well, Horn said, money will be available in 2007, 2008 or 2009 to add stations.